JAMB UTME - Principles of Accounts - 2005
Question 2 Report
When assets are realized during a partnership dissolution, the entries for the proceeds are to debit?
Answer Details
When assets are realized during a partnership dissolution, the entries for the proceeds are to debit cash account and credit realization account. Realization account is an account used to record all gains or losses on the disposal of assets during a partnership dissolution. The proceeds from the sale of assets are credited to realization account, while any expenses incurred in the process are debited to the same account. Finally, the balance on realization account is transferred to the partners' capital accounts in profit sharing ratio. In this case, since the assets are being sold and the proceeds are being received in cash, the cash account is debited to reflect the increase in cash. The realization account is credited to reflect the gain or loss made on the sale of assets.
Question 3 Report
Use the information below to answer questions .subscription.....................₦5420
Canopy rent......................₦400
Wages............................₦1100
Post-ages........................₦300
Loss from bar....................₦160
Purchases of new furniture.......₦120
Premises.........................₦4000
Furniture at the beginning.......₦1120What is the cash balance in the receipts and payments account?
Answer Details
To determine the cash balance in the receipts and payments account, we need to calculate the total cash inflows and outflows during the period. From the given information, the cash inflows are the subscription amount of ₦5,420, and the canopy rent of ₦400. The cash outflows are wages of ₦1,100, postages of ₦300, loss from the bar of ₦160, and the purchase of new furniture of ₦120. We are not given any information on the cash received or paid for the premises or the furniture at the beginning, so we will not include those amounts. Therefore, the total cash inflows are ₦5,820 (₦5,420 + ₦400), and the total cash outflows are ₦1,680 (₦1,100 + ₦300 + ₦160 + ₦120). To determine the cash balance in the receipts and payments account, we need to subtract the total cash outflows from the total cash inflows. Total cash inflows - Total cash outflows = Cash balance in receipts and payments account ₦5,820 - ₦1,680 = ₦4,140 Therefore, the cash balance in the receipts and payments account is ₦4,140. Thus, the answer is not one of the options given which might be an error in the question.
Question 4 Report
What are the appropriate recording procedures for entries in the trial balance?
Answer Details
The appropriate recording procedures for entries in the trial balance are Ledgers, source documents, and trial balance. Firstly, transactions are recorded in the relevant subsidiary ledgers such as the sales, purchase, and general ledgers. These ledgers are then used to post transactions to the general ledger, which summarizes all the financial transactions of the business. Secondly, source documents like invoices, receipts, and bank statements are used to verify and support the transactions that have been recorded in the ledgers. Finally, the trial balance is prepared by listing all the account balances from the general ledger and ensuring that the total of all the debit balances is equal to the total of all the credit balances. Therefore, the appropriate recording procedures for entries in the trial balance are ledgers, source documents, and trial balance.
Question 6 Report
Use the information to answer question .
A piece of equipment costing ₦120,000 was purchased on 1/1/1996. Depreciation was provided at 20% per annum on a straight-line basis. it was sold on 30/6/1999 for ₦31,500.The net book value of the piece of equipment at the time of sale was?
Answer Details
To calculate the net book value of the equipment at the time of sale, we need to determine the total depreciation charged on the equipment from 1/1/1996 to 30/6/1999. The equipment was purchased on 1/1/1996, and it was sold on 30/6/1999, which means it was used for a period of 3 years and 6 months. Using the straight-line depreciation method, we can calculate the annual depreciation as 20% of the initial cost: Annual Depreciation = 20% x ₦120,000 = ₦24,000 The total depreciation over the 3 years and 6 months is therefore: Total Depreciation = 3.5 years x ₦24,000 per year = ₦84,000 To calculate the net book value, we need to subtract the total depreciation from the initial cost of the equipment: Net Book Value = ₦120,000 - ₦84,000 = ₦36,000 Therefore, the net book value of the piece of equipment at the time of sale was ₦36,000.
Question 7 Report
Which of the following item is found on the credit side of the sales ledger control account?
Answer Details
Credit sales would be found on the credit side of the sales ledger control account. The sales ledger control account is used to track the total amount of credit sales made during a given period. Since credit sales are sales that are made on credit, the amount owed by customers for those sales would be recorded on the debit side of the sales ledger control account. Conversely, the total amount of credit sales made would be recorded on the credit side of the sales ledger control account. Therefore, credit sales is the correct option in this question.
Question 8 Report
Use the information below to answer question Jide and Haruna contribute ₦12000 each as capital and share profit equally. Jide draws ₦1500 and Haruna ₦1700 half-yearly. The profit for the year is ₦10000. Jide receives a salary of ₦2000.Calculate the profit available for appreciation?
Answer Details
Question 9 Report
The not-for-profit-making organizations generate their income mainly from?
Question 10 Report
A company incurred ₦21 000 in running its four departments, namely J,K,L and M with a corresponding number of employees as 1500, 2000, 3000 and 500 respectively. What is the share of department K?
Answer Details
To find the share of department K, we need to calculate the ratio of the number of employees in department K to the total number of employees in all departments, and then multiply that ratio by the total cost incurred by the company. The total number of employees in all departments is: 1500 + 2000 + 3000 + 500 = 7000 The ratio of the number of employees in department K to the total number of employees in all departments is: 2000/7000 = 2/7 Therefore, the share of department K is: (2/7) x ₦21,000 = ₦6,000 So the answer is ₦6,000.
Question 11 Report
Five hundred naria monthly is allowed on an imprest system. The following transactions took place.Period1:
Cash advanced to petty cashier......₦500
Petty cashier paid out: stamp.......₦200
Newspaper...........................₦250Period 2:
Cash to petty cashier...............₦450
Cashier paid for writing materials..₦350How much should the petty cashier receive after period 2?
Answer Details
Question 12 Report
The journal entries for the purchase of stock on credit are to debit?
Answer Details
Question 13 Report
Given:Liabilities..............₦23,700
Current assets...........₦20,300
Fixed assets.............₦64,500What is the capital introduced by the proprietor?
Answer Details
We can use the accounting equation: Assets = Liabilities + Capital We have the values for Liabilities and the total Assets, which is the sum of Current assets and Fixed assets. Assets = Current assets + Fixed assets = ₦20,300 + ₦64,500 = ₦84,800 Now we can rearrange the equation to solve for Capital: Capital = Assets - Liabilities = ₦84,800 - ₦23,700 = ₦61,100 Therefore, the capital introduced by the proprietor is ₦61,100.
Question 14 Report
The head office of Emeka Stores maintains the financial accounts of all its branches. The branch store account in the head office serves as the branch?
Answer Details
The branch store account in the head office of Emeka Stores serves as the branch's "cash account". This means that all financial transactions such as sales, purchases, expenses, and receipts made by the branch are recorded in the branch store account by the head office. The branch store account is a record of all financial activities of the branch, including its cash position, and is used to monitor the financial performance of the branch.
Question 15 Report
Use the information below to answer questions Purchase:..Raw materials.................₦15 000
Finished goods...........................₦11 400
Stock:....(1/7/01)Raw materials..........₦2 250
Work-in-progress.........................₦1 875
Wages:.....Direct........................₦17 100
Indirect.................................₦5 400
Stock:.....(30/06/02)Raw materials.......₦3 000
Work-in-progress.........................₦3 375The cost of raw materials consumed is?
Answer Details
The cost of raw materials consumed can be calculated as follows: Beginning Raw Materials Inventory (1/7/01) = ₦2,250 Add: Purchases of Raw Materials = ₦15,000 Raw Materials Available for Use = ₦17,250 Less: Ending Raw Materials Inventory (30/06/02) = ₦3,000 Raw Materials Consumed = ₦14,250 Therefore, the cost of raw materials consumed is ₦14,250. Option (D) is the correct answer.
Question 16 Report
The accounting method that reports incomes when earned and expenses when incurred is called?
Answer Details
The accounting method that reports incomes when earned and expenses when incurred is called "accrual accounting". In this method, transactions are recorded when they occur, regardless of when the money is exchanged. This means that revenue is recognized when it is earned, even if payment has not been received, and expenses are recognized when they are incurred, even if payment has not been made. Accrual accounting gives a more accurate picture of a company's financial health as it considers all revenues and expenses regardless of when they are actually received or paid.
Question 17 Report
Yahya,s bank account shows a credit balance of ₦1500,000. He paid ₦1700,000 into the bank.
What is his expected balance?
Answer Details
Yahya's bank account initially has a credit balance of ₦1500,000. He then paid ₦1700,000 into the bank. This means that his total credit would be ₦1500,000 (initial credit balance) + ₦1700,000 (new deposit) = ₦3200,000. Therefore, his expected balance is a credit balance of ₦3,200,000. So, the answer is "credit balance of ₦3,200,000".
Question 18 Report
Use the information below to answer question Jide and Haruna contribute ₦12000 each as capital and share profit equally. Jide draws ₦1500 and Haruna ₦1700 half-yearly. The profit for the year is ₦10000. Jide receives a salary of ₦2000.The balances of current accounts of Jide and Haruna are respectively?
Answer Details
Question 19 Report
The quick ratio is
Question 20 Report
The capital employed is
Question 21 Report
A company paid cash in redemption of ₦10,000 debenture.
The accounting entry to record this will be to debit?
Answer Details
The accounting entry to record the payment of ₦10,000 debenture would be to debit the "debenture" account and credit the "cash" account. This is because the company is reducing its liability by redeeming the debenture, which is similar to paying off a loan. The debenture account is credited to show a decrease in the company's liabilities, and the cash account is debited to show the outflow of cash. Therefore, the correct answer is "debenture and credit cash".
Question 22 Report
Given:
Purchases ledger balance..............₦4000
Purchases for the period..............₦50000
Cash refunded by suppliers............₦290
Cheques paid to suppliers..............₦42300
Returns outwards.......................₦2000
Discount received from suppliers.......₦400The balance of the purchases ledger control account is?
Answer Details
Question 23 Report
Use the information below to answer questionsZazzau Company:Cash in hand................?50
Cash in bank................?1 250
Stock.......................?4 880
Furniture...................?9 60
Building....................?5 500
Debtor......................?1 750
Creditors...................?2 150Drawings of ?125 were made by the shareholders of the company.
The capital of the company stands at?
Answer Details
Question 24 Report
Mr Bassey purchased a motor vehicle for use in his business and debited the purchases account with the same value. This is an error of?
Answer Details
The error described in the question is an error of principle. An error of principle occurs when a transaction is recorded in the wrong account, but the amount is correct. In this case, the purchase of a motor vehicle should have been debited to the motor vehicle account, which is a fixed asset account, instead of the purchases account, which is an expense account.
Question 25 Report
In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a?
Answer Details
Question 27 Report
The movement of goods from head office to a branch is treated in the head office as
Answer Details
The movement of goods from head office to a branch is treated in the head office as an "issue". This means that the goods are being taken out of the inventory of the head office and being sent to the branch. The head office will record this transaction as an issue of goods to the branch, and the branch will record it as a receipt of goods from the head office. The purpose of this transaction is to transfer inventory from the head office to the branch so that the branch can sell or use the goods. By keeping track of these transactions, the head office can monitor the inventory levels at each branch and ensure that they have the necessary goods to operate effectively.
Question 28 Report
Five hundred naria monthly is allowed on an imprest system. The following transactions took place.Period1:
Cash advanced to petty cashier......₦500
Petty cashier paid out: stamp.......₦200
Newspaper...........................₦250Period 2:
Cash to petty cashier...............₦450
Cashier paid for writing materials..₦350What was the balance of cash with the petty cashier ata the end of period 1?
Answer Details
At the end of period 1, the total amount of money spent by the petty cashier was: Stamp + Newspaper = ₦200 + ₦250 = ₦450 Therefore, the amount of money remaining with the petty cashier is: Imprest allowance - Total amount spent = ₦500 - ₦450 = ₦50 So the balance of cash with the petty cashier at the end of period 1 is ₦50. Therefore, the correct option is (a) ₦50.
Question 30 Report
The double principle of accounting was developed by?
Answer Details
Luca Pacioli is credited with the development of the double-entry principle of accounting. He was an Italian mathematician and friar who lived in the 15th century. Pacioli's book "Summa de Arithmetica, Geometria, Proportioni et Proportionalità" published in 1494, contained a section on double-entry bookkeeping which is considered as the first recorded treatise on accounting. The double-entry principle is a system of recording financial transactions that ensures the accuracy and completeness of accounting records. It involves recording each transaction in at least two accounts, with a debit in one account and an equal credit in another account.
Question 31 Report
A rent received by a trader for sub-letting part of his business premises should be added to the?
Answer Details
Question 32 Report
Given:
...............................Jan.2003.........Dec. 2003
Provision for bad debt........₦1000
Debtors..........................................₦20000
Bad debt to be written off.......................₦2000The provision for bad debt stands at 10% of debtors. How much is to be charged to profit and loss account as provision for bad debt?
Answer Details
Question 33 Report
The current ratio is
Answer Details
The current ratio is a financial ratio that measures a company's ability to pay its current liabilities using its current assets. It is calculated by dividing current assets by current liabilities. For example, a current ratio of 2:1 means that a company has 2 units of current assets for every unit of current liabilities. The higher the current ratio, the better a company's liquidity position, as it indicates the company has enough assets to cover its short-term debts. Therefore, a higher current ratio is generally considered more favorable, while a lower current ratio may indicate that a company may struggle to meet its short-term financial obligations.
Question 34 Report
The item that are contained in the bought ledger control account are?
Answer Details
Question 35 Report
Use the information below to answer questions Purchase:..Raw materials.................₦15 000
Finished goods...........................₦11 400
Stock:....(1/7/01)Raw materials..........₦2 250
Work-in-progress.........................₦1 875
Wages:.....Direct........................₦17 100
Indirect.................................₦5 400
Stock:.....(30/06/02)Raw materials.......₦3 000
Work-in-progress.........................₦3 375Determine the accumulated fund value?
Answer Details
Question 36 Report
Profit or loss in a partnership is usually arrived at after deducting from gross profit all expenses including?
Answer Details
Question 37 Report
Use the information below to answer questions Direct labour...................₦50 000
Beginning work-in-progress......₦4 000
Raw materials used..............₦18 000
Indirect labour.................₦4 000
Ending finished goods...........₦16 000
Ending work-in-progress.........₦9 000
Factory supplies used...........₦7 000
Selling expenses................₦25 000
Beginning finished goods........₦21 000
Other factory overheads.........₦19 000Calculate the prime cost?
Answer Details
Prime cost is the total cost of direct materials and direct labor used in production. To calculate the prime cost, we add the cost of direct labor and the cost of raw materials used. Direct labor = ₦50,000 Raw materials used = ₦18,000 Prime cost = Direct labor + Raw materials used Prime cost = ₦50,000 + ₦18,000 Prime cost = ₦68,000 Therefore, the prime cost is ₦68,000.
Question 38 Report
Use the information below to answer questions Direct labour...................₦50 000
Beginning work-in-progress......₦4 000
Raw materials used..............₦18 000
Indirect labour.................₦4 000
Ending finished goods...........₦16 000
Ending work-in-progress.........₦9 000
Factory supplies used...........₦7 000
Selling expenses................₦25 000
Beginning finished goods........₦21 000
Other factory overheads.........₦19 000What is the cost of goods manufactured?
Answer Details
The cost of goods manufactured is the total cost incurred in the production of finished goods during a particular period. It can be calculated by adding the total manufacturing costs for the period to the beginning work-in-progress and then subtracting the ending work-in-progress. Total manufacturing costs = Direct labour + Raw materials used + Factory supplies used + Other factory overheads + Indirect labour Total manufacturing costs = ₦50,000 + ₦18,000 + ₦7,000 + ₦19,000 + ₦4,000 = ₦98,000 Therefore, cost of goods manufactured = Beginning work-in-progress + Total manufacturing costs - Ending work-in-progress = ₦4,000 + ₦98,000 - ₦9,000 = ₦93,000 Hence, the cost of goods manufactured is ₦93,000.
Question 39 Report
The concept that has much influence over asset valuation and income determination is?
Answer Details
Question 40 Report
Musa merchants Trading and profit and Loss Account for the year ended Dec. 31st, 2003. Determine the closing stock.
Answer Details
Question 42 Report
If the assets and liabilities of a firm were valued at ?17,200 and ?5,120 respectively, the capital of the firm would be?
Answer Details
The capital of a firm is the difference between its total assets and total liabilities. Therefore, to calculate the capital of the firm, we need to subtract the total liabilities from the total assets. Given that the assets and liabilities are valued at ?17,200 and ?5,120 respectively, the capital of the firm would be: Capital = Total assets - Total liabilities Capital = ?17,200 - ?5,120 Capital = ?12,080 Therefore, the capital of the firm is ?12,080. Option C - ?12,080 is the correct answer.
Question 43 Report
Use the information below to answer questions Purchase:..Raw materials.................₦15 000
Finished goods...........................₦11 400
Stock:....(1/7/01)Raw materials..........₦2 250
Work-in-progress.........................₦1 875
Wages:.....Direct........................₦17 100
Indirect.................................₦5 400
Stock:.....(30/06/02)Raw materials.......₦3 000
Work-in-progress.........................₦3 375What is the cost of manufactured goods?
Answer Details
To calculate the cost of manufactured goods, we need to find the total cost of production during the period. Total cost of raw materials = opening stock + purchase - closing stock Total cost of raw materials = ₦2,250 + ₦15,000 - ₦3,000 = ₦14,250 Total direct wages = ₦17,100 Total indirect wages = ₦5,400 Total wages = ₦17,100 + ₦5,400 = ₦22,500 Total manufacturing cost = raw materials + direct wages + indirect wages Total manufacturing cost = ₦14,250 + ₦22,500 = ₦36,750 Cost of manufactured goods = total manufacturing cost + opening work-in-progress - closing work-in-progress Cost of manufactured goods = ₦36,750 + ₦1,875 - ₦3,375 = ₦35,250 Therefore, the cost of manufactured goods is ₦35,250.
Question 44 Report
Use the information to answer question .
A piece of equipment costing ₦120,000 was purchased on 1/1/1996. Depreciation was provided at 20% per annum on a straight-line basis. it was sold on 30/6/1999 for ₦31,500.The accumulated depreciation provision at the time of sale was?
Answer Details
To calculate the accumulated depreciation provision at the time of sale, we need to calculate the depreciation expense for each year first. The equipment was purchased on 1/1/1996 and sold on 30/6/1999, which means it was in use for 4.5 years (1996, 1997, 1998, 1999, and half of 1996). The annual depreciation rate is 20%, so the annual depreciation expense is: 20% x ₦120,000 = ₦24,000 The total depreciation expense over 4.5 years is: ₦24,000 x 4.5 = ₦108,000 The accumulated depreciation provision is the total depreciation expense over the years. So, the accumulated depreciation provision at the time of sale is ₦108,000. However, since the equipment was sold, we need to calculate the depreciation expense for the period of January 1, 1996, to June 30, 1999, which is 3.5 years. The annual depreciation expense is ₦24,000, so the depreciation expense for 3.5 years is: ₦24,000 x 3.5 = ₦84,000 Therefore, the accumulated depreciation provision at the time of sale was ₦84,000. So, the answer to the question is option (D) ₦84,000.
Question 45 Report
Use the information below to answer questions 25 and26.Zazzau Company:Cash in hand................₦50
Cash in bank................₦1 250
Stock.......................₦4 880
Furniture...................₦9 60
Building....................₦5 500
Debtor......................₦1 750
Creditors...................₦2 150Drawings of ₦125 were made by the shareholders of the company.They company's net current assets amount to?
Question 47 Report
Gamji Memorial Club carried out an activity which yield a profit of ₦10 000. This amount is to be transferred to the?
Answer Details
Question 48 Report
Departmental accounts are prepared to aid the comparison of the?
Answer Details
Departmental accounts are prepared to aid the comparison of the revenues, expenses, and profits of different departments within an organization. This helps management to identify which departments are performing well and which ones need improvement. By comparing the financial information of each department, managers can make more informed decisions about how to allocate resources, set goals, and evaluate performance. Therefore, departmental accounts are used to evaluate management performance rather than workers' performances or daily profits.
Question 49 Report
Given:Rent..............₦10,000
Rates.............₦5,000
Capital...........₦50,000
Salaries..........₦14,000
Cash..............₦26,000
Creditors..........₦5,000The total trial balance is?
Question 50 Report
Musa merchants Trading and profit and Loss Account for the year ended Dec. 31st, 2003.
Determine the closing stock
Answer Details
